BEE: What exactly counts?
The phrase "black economic empowerment" (BEE) has been used in many different contexts and ways – sometimes not accurately reflecting how it is defined by government.
The issue can be confusing. According to the BEE Act, government views black economic empowerment in the broadest way possible, and includes community empowerment and the empowerment of people living in rural areas in its definition. Added to this, business empowerment quotas are measured in at least two ways, and government tendering requirements – which refer to historically disadvantage individuals - are slightly differently weighted.
What is black economic empowerment?
The Broad-Based Black Economic Empowerment Act of 2003 defines "black people" as a generic term that includes "Africans, Coloureds and Indians". According to the Act, "broad-based black economic empowerment" – with an emphasis on "broad-based" - refers to the economic empowerment of all black
people including women, workers, youth, people with disabilities and people living in rural areas.
The socioeconomic strategies envisaged include increasing black ownership and management of businesses, facilitating community and worker ownership of "enterprises and productive assets", skills development, issues around equal representation in the workplace, preferential procurement, and investment in businesses that are owned by black people.
Currently there are two categories for empowerment as it relates to company ownership. "Empowering companies" means a company with 26% black ownership. "Empowerment companies" refers to a company with 50% black ownership. The latter definition is, however, currently being revised and and will entail black ownership of 50.1%.
The issue of empowerment is slightly different when considering government tender requirements. State tenders make reference to Historically Disadvantaged Individuals (HDIs) – a category
carrying a 25% weighting in evaluating tender proposals. HDIs, which indicates black ownership and managerial empowerment levels in a business, includes white women in its empowerment measurement.
Read the BEE Act (2003).
SA.info reporter
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